China Dominates Asia-Pacific AI Investment

Asia-Pacific spending on artificial intelligence (AI) systems is forecast to reach nearly USD 5.5 billion in 2019, an increase of almost 80 percent in spent in 2018, IDC says, and will be lead by Chinese investment. Most of that investment will happen in China, which will represent nearly 66 percent of the Asia/Pacific excluding Japan (APEJ) regional spending on AI systems. 

However, Asia-Pacific (excluding Japan and China) will show the fastest growth in adoption of AI-enables solutions and deployment, led by banking, retail and manufacturing industries, according to IDC. 

IDC further expects spending on AI systems in Asia-Pacific to reach USD 15.06 billion in 2022 with a compound annual growth rate (CAGR) of 50 percent over the 2018-to-2022 forecast period.

Regional spending on AI systems will be led by the retail industry where retailers will invest more than 70 percent of all AI spending on solutions such supporting merchandising, expert shopping advice and  recommendations, automated customer service agents and supply or logistics. 

The industries that will experience the fastest growth in AI systems spending over the 2018-2022 forecast are healthcare providers (60.2 percent CAGR) and process manufacturing (60.1 percent CAGR).

source: IDC

Banking entities will focus on applying AI to fraud analysis and investigation, program advisors and recommendation as well as automated customer agents.

The AI use cases that will see the most investment in 2019 are automated customer service agents (almost $700 million), sales process recommendation and automation (more than $450 million), and intelligent process automation (more than $350 million), IDC says.

The fastest growth will be seen in pharmaceutical research and discovery and digital twin/advanced digital simulation.

Hardware will be the largest area of AI systems spending in 2019 with nearly USD 7 billion going towards server and storage.

Where Enterprises See IoT Value

Respondents to a Microsoft-sponsored survey say three to four major values prompt interest in internet-of-things solutions. As almost always is the case for early value drivers of new technology, operational improvements are key. 

IoT is valued for efficiency and productivity gains. The top two reasons that companies adopt IoT are operations optimization (56 percent) and improvement of employee productivity (47 percent). 

For 44 percent of respondents, safety and security come next. Lower percentages of respondents believe IoT is useful in  supply chain, quality assurance or asset tracking. That is probably not an unusual finding since some business verticals do not have to track assets or run complicated supply chains as a big part of their operations. 

You might notice one omission. Respondents pioneering IoT are not looking at deployments to directly grow revenue. Most of the attention is on cost reduction and efficiency. And that happens because any important new technology is easiest to justify as a way of reducing capex or opex. 

source: Microsoft

Manufacturing executives say internet of things use cases work for industrial automation, quality and compliance; production planning and scheduling as well as supply chain logistics. In manufacturing, the top use cases for IoT are: automation (48 percent), quality and compliance (45 percent), production planning (43 percent), supply chain logistics (43 percent), and plant safety and security (33 percent). 

For retail or wholesale companies, IoT is highly relevant for supply chain (64 percent) and inventory optimization (59 percent), while for transportation and government organizations equipment management and safety/surveillance are particularly important (40 percent to 55 percent). 

Within healthcare, IoT helps companies track patients, staff, and inventory (66 percent), as well as assists with remote device monitoring and service (57 percent). 

source: Microsoft

source: Microsoft

IoT adopters believe around 33 percent of IoT projects fail in proof of concept, often because implementation is expensive or the bottom-line benefits are unclear. Those of you familiar with enterprise applied new technology trials will not be surprised. None of this is unusual. 

Among those who have had IoT projects stall in the trial stage, the top reason is the high cost of scaling. Some 32 percent of respondents said that was the main issue with getting their projects funded. 

In other cases, business benefits were not well defined: 28 percent of respondents reported that their projects failed because their pilots demonstrated unclear business value or return on investment.

Some 26 percent of respondents found it hard to justify a business case when short-term impact could not be demonstrated. 

None of that would sound unfamiliar to those of you with experience or familiarity with big IT projects, especially those using new technologies. 

Where is the Edge?

Discussing the definition of edge and business opportunities are: 

• Leon Chang, Director, Technical Architecture, AT&T
• Alex Quach, VP & GM Wireline and Core Network Division, Intel 
• Mike Hansen, AVP, Open Telco Strategies, Red Hat
• Constantine Polychronopoulos, VP and CTO, Telco Business Unit, VMware
• Harry Smeenk, Chief Business Development Officer, TIA

How Much Measurable Benefit from "Digitalization?"

Digitization or digital strategy are terms one hears tossed about often. Perhaps too often, some would argue, as it is not always clear what is meant by such terms. In the early 1980s, such terms likely referred to use of desktop personal computers, client-server computing and productivity suites. 

After the turn of the century, such terms often referred to use of the internet. 

A decade ago, digital strategy might most often have referred to harvesting and analytics of big data sets. Just as often, digital strategy might have referred to adoption of cloud computing. 

These days, the terms are more often used to describe applied machine learning, artificial intelligence, Internet of Things and advanced robotics. 

“Digital technologies have the potential to spur a global productivity boom, especially as productivity growth in many countries is at all-time lows,” say researchers at Moody’s.  “Digitization, which entails the adoption of advanced technologies such as big data, machine learning, AI, cloud computing, "internet of things," and advanced robotics, is aimed at enhancing information processing and the quality of decision making while further automating routine tasks.”

"Digital technologies can lead to 'winner-take-all' economics, with small differences in quality potentially leading to substantial differences in earnings," says Associate Managing Director Elena Duggar. 

“Gains from company investments in information technology (IT) tend to have a five-to-seven year lag as they require significant organizational innovation and workforce retraining,” Moody’s says. Some of us would say it will take even longer than that to produce measurable gains. 

Some industries will show results sooner. And shockingly, in some cases we will probably not be able to measure any improvement in productivity. That will likely be the case when artificial intelligence is applied to business processes as well. 

Though we might note productivity improvements after information technology advances, we have seen relatively restrained impact since the advent of the internet, as disruptive as that has been. 

source: Goldman Sachs

Edge Computing Value, as Seen by VMware and Dell

How does edge computing impact businesses and IT? What is the real value of edge computing? Bask Iyer, VMware CIO and Dell Technologies GM for Edge Computing and IoT, explains.

AT&T names Microsoft its Preferred Cloud Provider for Non-Network Apps

Microsoft will be the preferred cloud provider for non-network applications, AT&T says. AT&T is migrating most non-network workloads to the public cloud by 2024, and will do so using Microsoft cloud computing facilities. 

As part of the agreement, AT&T will provide much of its workforce with robust cloud-based productivity and collaboration tools available with Microsoft 365, and plans to migrate non-network infrastructure applications to the Microsoft Azure cloud platform.

AT&T and Microsoft will together help enable a future of ubiquitous computing through edge technologies and 5G. In return, Microsoft will tap into the innovation AT&T is offering on its 5G network, including the design, test, and building of edge-computing capabilities.

How Many IoT Devices Now in Use?

Are there nine billion Internet of Things devices already in use, globally? Cisco says so.

Cisco also predicts there will be more than 64 billion IoT devices in use by 2025, up from about 10 billion in 2018, and nine billion in 2017, according to Business Insider. Cisco predicts machine-to-machine IoT connections will grow from 6.1 billion in 2017 to 14.6 billion by 2022.

source: Cisco

That might seem an unusually-high number of IoT devices in use, but remember that M2M includes smart meters, video surveillance, healthcare monitoring, transportation, and package or asset tracking sensors. 

T-Mobile US Launches Asset Tracking on NB-IoT Network

T-Mobile US has launched what it says is the first U.S. narrowband IoT asset tracking solution, now available nationwide from T-Mobile for Business.

T-Mobile for Business will sell the Roambee BeeAware asset tracking solution running on a Narrowband IoT (NB-IoT) network. T-Mobile touts the solution’s security and device battery efficiency. 

Roambee’s BeeAware asset tracker easily attaches to shipments, pallets, or individual assets to provide item-level location and temperature monitoring indoors, in-transit, and outdoors, T-Mobile US says.

Roambee’s Honeycomb analytics platform analyses sensor data such as

• Location

• Temperature
• NIST calibrated temperature
• Humidity
• Air pressure (altitude)
• Ambient light
• Shock (impact)
• Acceleration
• Tilt

Event tracking includes:

• Estimated time of arrival changes
• Route deviations
• Temperature excursions
• Unauthorized stops
• Restricted time movement
• Tampering with goods
• Theft of goods
• Damage to goods

Key asset events include:

• Unauthorized movement
• Asset missing
• Asset aging

Satellite IoT: A Sanity Check

It normally is a good practice to apply a sanity test to forecasts. By 2024, there will be 24 million Internet of Things connections made by satellite, according to ABI Research. That sounds reasonable.

Coverage over oceans and other isolated locations normally is the place where satellite connections shine, so IoT should be viable there as well. Oceans cover 71 percent of the earth's surface, and that is where satellite has almost no competition from other networks. So land represents 29 percent of the earth’s surface.

Where some of us might quibble is when the claim of full coverage of the earth’s surface is cited as a key advantage for IoT connectivity, compared to terrestrial networks of all kinds. 

“Terrestrial cellular networks only cover 20 percent of the Earth’s surface, while satellite networks can cover the entire surface of the globe, from pole to pole,” says Harriet Sumnall, Research Analyst at ABI Research. 

Essentially, satellite has its best use case over the 71 percent of earth’s surface that is ocean, and over the roughly nine percent of land surface where population is so thin mobile networks do not exist. 

Of course, population density also correlates with the 20 percent of earth’s surface where mobile networks can be operated sustainably. Looking at current use cases for satellite, most--with the exception of maritime and other remote location connections--are for locations on land. Video entertainment backhaul is the overwhelming driver of service revenues. 

source: Satellite Industry Association

source: Mordor Intelligence

The point is that even at 24 million connections, it is conceivable that revenues might be less than $6 billion in annual revenues. That is by no means insignificant. On the other hand, global mobile and fixed telecom revenues might be somewhere in the $1.4 trillion annual range by 2022 or so. 

source: Northern Sky Research

source: STL Partners

The point is that if satellite IoT follows the historic pattern, and adds most value in maritime and other use cases of low population density, it is going to be dwarfed by IoT connections supplied by mobile and fixed networks, simply because denser population areas are where most enterprises and people are located. And that is where most of the IoT demand will be as well.

Top 15 Edge Computing Use Cases

Edge computing covers many use cases, spanning consumer and enterprise settings. Though there is much attention of internet of things use cases, where it is computers communicating with other computers, many edge computing use cases involve consumer applications and devices of a more-traditional sort. 

To the extent that we do not generally consider mobile phones, PCs, tablets or smart watches core IoT use cases, much edge computing value will come in consumer entertainment areas such as gaming or video entertainment, especially as augmented reality apps become more widespread. 

source: Mobiledgex

Gartner Predicts Flat 2019 IT Spending, Data Center Down 3.5%

Enterprise software will be the fastest-growing part of informatiion technology spending in 2019, shfiting from on-premise to cloud modes, says Gartner.

Spending on devices, data center systems and communication services will increase the least, according to Gartner.

Global information technology spending in 2019 will be flat, at $3.74 trillion in 2019, an increase of 0.6% from 2018, according to Gartner analysts.

As always, regional differences exist. North American IT spending is forecast to grow 3.7 percent in 2019. Chinese IT spending will grow 2.8 percent, Gartner estimates.

The enterprise software market will experience the strongest growth in 2019, reaching $457 billion, up nine percent from $419 billion in 2018. Generally speaking, investments are shifting from on-premises to off-premises cloud. 

Worldwide IT Spending Forecast (Billions of U.S. Dollars)
	2018 Spending	2018 Growth (%)	2019 Spending	2019 Growth (%)	2020 Spending	2020 Growth (%)
Data Center Systems	210	15.7	203	-3.5	208	2.8
Enterprise Software	419	13.5	457	9.0	507	10.9
Devices	712	5.9	682	-4.3	688	0.8
IT Services	993	6.7	1,031	3.8	1,088	5.5
Communications Services	1,380	-0.1	1,365	-1.0	1,386	1.5
Overall IT	3,716	5.1	3,740	0.6	3,878	3.7

source: Gartner

Prior to 2018, more of the cloud opportunity had been in application software and business process outsourcing, Gartner says. Additional application software segments, including office suites, content services and collaboration services, will shift towards cloud delivery next.